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CEO Daily: Wednesday, 30th November

Lots of news from team Trump this morning.

Air-conditioning company Carrier, a unit of United Technologies, said last night it had reached a deal with Trump to keep nearly 1,000 jobs in Indiana, instead of moving them to Mexico. Trump and Vice President-elect Pence will travel to Indiana Thursday to make the announcement. Details of the “deal” with Carrier are unclear, but Trump is expected to use Thursday’s visit to discuss his plans to reduce regulations and cut corporate taxes. The announcement enables Trump to deliver a down payment on his campaign promise to keep jobs in the U.S., even before he takes office.

Trump also chose two fellow billionaires to steer economic policy in his administration. Steven Mnuchin, former Goldman Sachs partner and Hollywood financier, is his pick to be Treasury Secretary, and Wilbur Ross, known for his investments in distressed industries, will take the Commerce job. Elaine Chao, former Labor Secretary for George W. Bush and wife of Senate Majority Leader Mitch McConnell, got the nod to be secretary of transportation, and Rep. Tom Price of Georgia, a determined opponent of the Affordable Care Act, will be health secretary.

Overall, the Trump administration is shaping up to look far friendlier to big business than candidate Trump’s rhetoric would have suggested. And in Washington, corporate lobbyists are shaking off their five-year slumber in preparation for what could be a very busy 2017.

Still hanging: Secretary of State. Trump continued his public dance with Mitt Romney last night, and no one seems to know whether it’s a serious romance, or pure theater. I’d bet the latter, but who knows? My decades of experience watching Washington is proving of no value in predicting Trump.

More news below.

Alan Murray

Top News

Home Prices Back Above Boom-Era Peak

U.S. home prices hit a new record high, passing the 2006 boom-era high for the first time. The S&P CoreLogic Case-Shiller index has risen some 5.5% in the last year, but prices are still around 16% below the 2006 high once adjusted for inflation. Prices had troughed in 2012, 27% below the peak. The rise in prices appears to be slowly stimulating more building: single-family housing starts rose 11% in October, but remained well below the historical average. In indirectly related news, the Conference Board reported consumer confidence leapt to a nine-year high in November. WSJ, subscription required

Central Banks Fret Over Rising Yields

Donald Trump’s election victory has “reinforced existing vulnerabilities” in the global financial system, the Bank of England said in a half-yearly review of financial stability. Its concerns focused on the rise in bond yields and the dollar in anticipation of higher growth and inflation under the new administration. That may cause distress outside the U.S., especially in emerging markets, it said. ECB President Mario Draghi had warned the EU Parliament about such risks on Monday. Separately, the BoE ordered Royal Bank of Scotland to raise another 2 billion pounds in capital after it failed the annual stress test results. It also wagged a finger at Barclays and Standard Chartered. FT, metered access

Disney Chastises Chinese Suppliers

Children as young as eight years old are working in the supply chains of companies including Kellogg’s, Colgate-Palmolive, Procter & Gamble, Unilever and Nestlé, according to a new report by Amnesty International. It zeroed in on the role of palm oil made by Wilmar, a Singapore-based commodities group, which routinely exposed them to pesticides as well as diverting them from school. In a variation on the theme, Disney has cut ties with one Chinese toy supplier and warned another after the NGO Chinese Labor Watch exposed widespread violations of labor standards. Fortune

Praxair, Linde Revive Merger Deal

The merger of industrial gas giants Praxair and Germany’s Linde is back on. The two companies confirmed they had resumed talks after their last flirtation foundered two months ago. The Germans were reluctant to take a subordinate role in a group that would be headquartered in the U.S. and led by Praxair CEO Steve Angel. Since then, Linde’s CFO has left and its CEO Wolfgang Reitzle has indicated he will step down in April. A deal would create the world’s biggest maker of industrial and medical gases, worth $60 billion at current valuations, but would face considerable antitrust scrutiny. WSJ, subscription required

Around the Water Cooler

• Huffington’s Anti-Burnout Crusade Goes ‘Global’

Author and entrepreneur Arianna Huffington is launching a new company, Thrive Global, that aims to build on the ideas underlying her book ‘The Sleep Revolution’. Fortune editor Clifton Leaf’s profile of it (link below) describes “a company is tapping into every tool (and business model) it can think of for promoting emotional and physical well-being in the workplace: training companies how to measure and promote employee wellness; serving as a new media hub for conversations about wellness; and selling a bunch of cool stuff designed to help people along that path—from non-pharmacological sleep aids, to meditation guides, to smartphone-silencing accessories.” Fortune

The Decline of the Public Company

Public corporate America is shrinking, and that should worry  all of us. Such are the findings of a new study by the National Bureau of Economic Research, which highlights how wealth has been increasingly concentrated in a small number of public companies as their overall number has halved over the last 20 years. Authors Kathleen Kahle of the University of Arizona and Rene M. Stulz of Ohio State fret that the average age of the listed company has risen from 12.2 years to 18.5 in the last two decades, which is a problem if you think that old firms innovate less than new ones. More broadly, it becomes harder for individuals to share in the gains of capitalism if the bulk of value creation is restricted to private markets to which only the wealthy have access.  Fortune

Over 140 Arrested in ‘Fight for $15’ Protests

Police made over 140 arrests at protests organized by the ‘Fight for $15’ campaign for a higher minimum wage. The arrests in New York, Los Angeles, Detroit and Cambridge, Massachusetts mobilized fast-food workers, home and child care providers, janitors, airport staff and–for the first time in large numbers–Uber drivers (whose status as employees isn’t acknowledged by the company). President-elect Donald Trump repeatedly promised to improve the lot of the ‘forgotten’ people during the campaign, but at other times also suggested U.S. workers were overpaid.  Fortune

OPEC: Sound and Substance

The Organization of Petroleum Countries is set to announce, with great fanfare, a deal to cut crude oil output and lift prices. Crude futures have rebounded 6% overnight after signs of narrowing differences between Saudi Arabia, Iran and Iraq. The big question will be how much substance is behind the inevitable high-flown rhetoric. Until yesterday, the most likely outcome seemed to be an agreement that talks big but doesn’t meaningfully drain the glut on world markets. That would risk pushing back the gradual rebalancing of supply and demand into the second half of next year. Fortune

Lucid Motors – Light of the Charged Brigade?

Startup Lucid Motors said it will site a $700 million factory to build its first electric car in Casa Grande, Ariz., with a view to creating 2,000 jobs there by 2022. The plant’s will consist largely of a network of suppliers over the border in the Mexican state of Sonora. Lucid, which focused initially on battery technology under the name Atieva, plans to start serial production in 2018 of a 1,000-horsepower model that will boast a range of 400 miles on a single charge. It’s a shot in the arm for the EV sector after the Chinese backers of Faraday Future’s $1 billion project in Nevada ran into financial problems earlier this month. Fortune

Summaries by Geoffrey Smith;